PeopleSoft deal is body blow to Oracle

Link: PeopleSoft/JD Edwards deal gets green light

Database giant Oracle had aggressively pursued PeopleSoft since early June, raising its offer from $5.1bn to $6.3bn, combined with a campaign in the press trying to persuade PeopleSoft shareholders of the attractiveness of its proposed deal.

But today, following approval by US regulators earlier in the week, California-based PeopleSoft announced it had purchased 110 outstanding million shares in JD Edwards, or 88% of the business. The remaining shares will be acquired at the end of August.

Not unexpectedly, PeopleSoft president and CEO Craig Conway trumped up the deal, labelling it ‘an important milestone’ in the history of the company.

‘The powerful combination of PeopleSoft and JD Edwards creates the second largest enterprise applications software company in the world,’ he added.

Conway’s counterpart at JD Edwards, Bob Dukowsky, was equally glowing, saying the deal was the culmination of a ‘strategic plan to create significant value’ for all stakeholders.

News of the deal coincided with better-than-anticipated quarterly results at PeopleSoft with revenue up to $497.4m to June, up 3% on the year.

Larry Ellison will be left smarting. The PeopleSoft/JD Edward deal will create the world’s second largest business applications software group with combined annual revenues of $2.8bn, and scuppers his hopes of building a company to take on the might of SAP.

At the same time, Oracle faces lawsuits from PeopleSoft and JD Edwards, which claim that Oracle’s bid was intended to disrupt the PeopleSoft/JD Edwards deal, while regulators have also taken an interest in Oracle’s acquisition plans, over anti-trust fears.

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